Business process outsourcing or BPO involvess contracting a third-party firm with the expertise you need to carry out day-to-day tasks like customer service, technical support, and back office operations, many times at a lower cost than would be feasible in-house .
Customer service support is the primary area most businesses outsource. BPOs can be categorized into three groups, depending on the location of the third-party vendor.
The most common is offshore outsourcing or partnering with business process outsourcing companies that are in another country. A U.S. firm working with a call center in India is a good example.
Nearshore outsourcing is when the company and a third-party firm are located in neighboring countries. For instance, nearshoring firms in the United States include vendors in Mexico or Canada.
Finally, onshore outsourcing is when both companies are in the same country, regardless of city or province. For example, an Australian bank outsourcing app development to an Australian software developer is an example of onshoring.